The Catalan brewer Damm is in the final phase of an agreement with Nestlé for the manufacturing and distribution of Nestea in Spain. This movement comes after Coca-Cola’s announcement not to renew its contract with the Swiss multinational, which expires at the end of December 2024. It is expected that the agreement between Damm and Nestlé will close in November, with the Valencian Font Salem plant as the main production center.

Damm, known for its long history in beer manufacturing, would thus be finalizing the details of an agreement with Nestlé to assume the production and distribution of the popular brand of beer. ready to drink tea, Nestea, in the Spanish market. According to sources from the Catalan company, the negotiation is in an advanced phase and the contract is expected to be signed throughout the month of November, just before the current agreement with Coca-Cola expires on December 31, 2024.

This change occurs in a context where Coca-Cola has already communicated that it does not intend to renew its contract with Nestlé for the manufacture of Nestea. Instead, the beverage multinational is betting on its own brand, Fuze Teawhich plans to promote from 2025 with an original formula “exclusive to The Coca-Cola Company”as stated by the company.

Nestlé had to issue an official statement a few days ago in which the Swiss multinational stated that the brand will continue to be available on supermarket shelves as of January 1, 2025, given the speculation raised about his possible departure from Spain: “You will be able to continue enjoying Nestea in all its flavors because it will continue to be marketed in our country once the current contract in force between Nestlé and Coca-Cola ends”they explained from the company.

For his part, Damm has assured that the negotiations with Nestlé focus on an agreement that covers both the manufacturing and distribution of Nesteanot only in the food channel, but also in the Horeca sector (hotels, restaurants and cafes). According to the brewery’s statements to the EFE agency, Damm has the necessary infrastructure and technology to carry out this ambitious project at its Font Salem plant, located in Valencia.

If everything progresses as planned, the Font Salem plant will be in charge of the Nestea manufacturingwith an estimated production capacity that will exceed 500,000 hectoliters per year. This facility has the technical capacity to take on the production of the popular tea, which represents an important step for the Catalan brewery in its product diversification beyond its core beer business.

Damm faces a considerable challenge, but with technological support and a production capacity that seems adequate to respond to the Spanish market demand for ready-to-drink tea.

Coca-Cola prepares the replacement with Fuze Tea

For its part, Coca-Cola has already begun to move its chips to cover the gap that Nestea will leave in its product portfolio. The multinational has launched Fuze Tea as the alternative to Nestea, and is marketing the Fuze Tea Fusion range in Spain as well as the “Original Flavor” version.

This move not only marks the end of an era in which Coca-Cola and Nestlé collaborated to produce and distribute Nestea, but also direct competition between the two giants. Fuze Tea, which already has a presence in several European markets, will seek to consolidate itself in Spain as Nestea’s main competitor in the tea beverage segment.

In this context, Damm is positioned to become Nestlé’s new partner in Spain for the production of Nestea, while Coca-Cola is committed to strengthening its own tea brand, which will cause competition between both brands to intensify in the coming years.